LSEG Risk Intelligence
On-the-ground insights
Conducted by CeFPro, in partnership with LSEG Risk Intelligence, the research involved surveying 120 financial services risk professionals across the US and EMEA to develop an understanding of the real-world challenges that define the risk space. One-on-one interviews were also conducted.
Current vs. emerging risk management capabilities
Organisations appear largely happy with the effectiveness of their existing screening and due diligence processes to identify and mitigate risk:
- 52% of respondents rated their processes as “extremely” or “very” effective.
Interestingly, confidence levels are much lower when it comes to emerging risks:
- Just 35% of respondents are either “extremely” or “very” confident in tackling emerging risks.
This difference in opinions of current capabilities vs. confidence in accurately and effectively identifying emerging risk is marked.
The disconnect between current screening and due diligence vs. attitudes toward emerging risks paints a picture of reduced confidence for the future.
The state of financial crime compliance programmes in US and EMEA | 2024
These concerns over future successful risk mitigation mean that organisations need to take stock now and implement measures – including ensuring access to reliable data and leading technology – to help them manage the future risk landscape with greater confidence.
Technology and data: the keys to future success
Additional interviews with senior risk management professionals unpacked some core themes – notably that technology is expected to play a fundamental role in helping organisations build successful future risk strategies.
Technology is clearly on the radar for risk professionals, with many of the experts interviewed highlighting that technology has seen the biggest allocation of both effort and budget within their organisations.
Interviewees shed further light on an area where technology is having a substantial impact – data cleansing for the purpose of analysing and investigating alerts across key areas such as sanctions, KYC and predicting future events.
Our research further suggests that ensuring the accuracy and reliability of data is a noteworthy challenge for many respondents:
- Only 21% of risk professionals are “not very” or “not at all” concerned with the accuracy and reliability of the risk intelligence data they use – meaning that the balance have at least some concerns in this regard.
It is important to remember that technology and data work hand-in-hand, and that without the right technology, managing data can quickly become a significant challenge.
Post-research interviews confirmed this view, with many of those interviewed saying that testing requirements on data are stringent and without the right technology, data verification and validation are challenging. Many also said that they rely on multiple sources to help them build a complete picture of risk and often do not have access to additional data insights, such as negative media scanning prior to onboarding.
On balance, our research concludes that survey respondents feel “concern about the future preparedness of their organisations to effectively meet and manage the challenge of emerging risks.” It further reveals that there is a clear drive to leverage innovative tools and technology to enhance some of the key elements of successful risk management, including onboarding, screening, due diligence and assessment processes.
As organisations look to prepare for the future risk landscape, the first port of call is ensuring that they have reliable access to trusted data, advanced technology and the right human capital to help them meet evolving risk. Those that do not keep pace in this dynamic space risk falling behind in mitigating the substantial effects of financial crime.
For more on financial crime read our previous insights in this series: Financial crime compliance: unpacking key risks and challenges, and Financial crime compliance: Budgets and resources: time for a reset?
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